EMT(SH:601208) Great Wall Securities·2024-11-01 01:44Investment Rating - The report maintains a "Buy" rating for Dongcai Technology, expecting the stock price to outperform the industry index by over 15% in the next six months [14]. Core Views - The revenue growth in the first three quarters of 2024 is primarily attributed to the gradual release of production capacity from new industrial projects, including new energy materials, optical film materials, and electronic materials [2][8]. - The company's actual controller's consistent actions in increasing shareholding demonstrate confidence in the company's long-term development [7][8]. Financial Performance - For 2022A to 2026E, the projected revenue growth rates are 12.1%, 2.7%, 18.4%, 26.4%, and 19.7% respectively, with revenues expected to reach 44.25 billion, 55.91 billion, and 66.95 billion in 2024E, 2025E, and 2026E [1][8]. - The net profit attributable to the parent company is projected to grow from 3.49 billion in 2024E to 6.12 billion in 2026E, with corresponding growth rates of 6.2%, 38.0%, and 27.0% [1][8]. - The average selling prices of various materials have shown a decline, particularly in photovoltaic and epoxy resin products, impacting the company's profitability [2]. Operational Metrics - The company reported a decrease in sales expense ratio to 1.25%, management expense ratio to 1.79%, and R&D expense ratio to 4.33% in the first three quarters of 2024 [3]. - Cash flow from operating activities showed a net outflow of 0.43 billion, while cash flow from financing activities increased significantly by 6294.69% to 4.84 billion [3]. Project Developments - Dongcai Technology is constructing a new project with an annual production capacity of 20,000 tons of electronic materials for high-speed communication substrates, which is expected to enrich the product structure [6][8].